Newsletter
CLA DRAFTS PLANT CLOSURE ASSESSMENT CRITERIA
The Council of Labor Affairs (CLA) recently completed drafting the Criteria for Assessing Enterprise Closures. These explicit criteria are provided for county and city governments to determine, within two weeks of being requested by an applicant to do so, whether a business entity's operating status qualifies as a plant closure, so that employees can promptly receive Wage Arrears Repayment Fund payments, retirement pay, severance pay, etc.
The criteria mainly cover two areas: the operating status of the factory concerned, and the extent to which workers' interests have been harmed. The 14 criteria relevant to plant operation are: whether an employment relationship still exists between the enterprise and the great majority of its workforce; whether the enterprise has registered its dissolution or cessation of operations; whether it has applied for cancellation of its factory registration; whether it has applied for cancellation of its business registration; whether it is in fact still operating; whether its operating facilities are still in use; whether it applies for Unified Invoices in a normal way; whether the whereabouts of the owner or his or her representative are known; whether the enterprise's liabilities exceed its assets; whether its checks have been dishonored or it has lost its credit standing with financial institutions; in the case of a listed or an OTC company, whether its shares have been suspended from trading or delisted; whether it is undergoing voluntary or compulsory restructuring; whether it is in arrears of tax payments; and whether the owner is implicated in any other civil or criminal case or economic crime.
The criteria relating to workers' rights include: whether the employer is in arrears of wage payments; whether it is in arrears of Labor Insurance and National Health Insurance contributions; whether it is in arrears of severance or retirement payments; whether it is in arrears of Workers' Retirement Fund payments; and whether it is in arrears of Wage Arrears Repayment Fund contributions.
Under the criteria, an enterprise's effective closure date may be the date of stopping work or ceasing operations announced by the enterprise itself, the expiry date of the employment contract between the enterprise and its workers, the date on which the enterprise's facilities ceased operating, or the date on which employees applied for industrial dispute conciliation.
Whenever employees or an enterprise deem it necessary, they may request a determination from their local government agency responsible for labor affairs, which will then set up a closure assessment team to carry out an on-site assessment of the enterprise's operating status and make a report of its findings as to the plant's closure, including the effective closure date. Teams will include personnel from county or municipality governments, Labor Insurance offices, economic planning and development agencies, tax collection agencies, and county or municipality labor union federations.
Once an enterprise is determined to have ceased operations, employees may apply to collect arrears of wages for the six months prior to the effective closure date, and the employer may pay out severance or retirement payments from its Workers' Retirement Fund accounts.